WB told: Cancel RP debts instead of offer to 'protect poor'

MANILA, Philippines - Rejecting World Bank offer to protect the poor from a global financial crisis, a debt watchdog urged it to cancel onerous debts of the Philippines instead.
The Freedom from Debt Coalition (FDC), in demanding the cancellation of debts, called the World Bank offer a "cure worse than the disease."
"Truly, if World Bank is sincere in helping poor countries mitigate the onslaught of the financial crisis, the best way it can help is through the total and unconditional cancellation of all debts it is claiming, many of which are challenged as illegitimate," it said in a statement on its website.
"Lest we forget, the role of international financial institutions such as the World Bank in this unfolding economic crisis is not in anyway negligible," it added.
Earlier, the World Bank offered to protect the poor and developing countries against the financial turmoil by making available more aid and loans.
But FDC said the large debt service payment on external debts as claimed by financial institutions such as World Bank resulted in a scarcity of resources.
Needed funds that could have been used to finance important social services and productive sectors to fully develop and strengthen developing nations' real economies were siphoned to pay debts, it lamented.
"As such, developing countries in a dire need to religiously honor debts claimed from them and mobilize new resources at the same time exposed themselves to the international financial markets through massive investment and speculative trading," FDC said.
FDC also pointed out the vulnerability of many developing countries to the crisis can be significantly traced to the policies endorsed by the said financial institutions.
It said the country's implementation of trade liberalization and privatization and its firm loyalty to an export-oriented economic paradigm were the consequences of using debt, aid, access to credit and even debt relief as instruments of domination.
The group also demanded that the World Bank cease from pushing loans and false aid, which it said would only contribute to the further contraction of the said countries' social and economic spending especially during a grueling international economic crunch.
It said aid must be given as a form of reparation and as redistributive justice by World Bank to the south instead using it as tools to further aggravate the international debt burden.
FDC said as of end-2007, World Bank-claimed debts accounts for the second largest multilateral external debts the Philippines is servicing, amounting to $1.647 billion.
The group claimed many of these debts are illegitimate, including the $121.8-million Small Coconut Farms Development Project (SCFDP), the $100-million Textbook Procurement Project, and the IBRD-funded Agrarian Reform Communities Project (ARCP).
It was reported that the SCFDP had been beset with inefficiency and widespread corruption among government officials and the private contractors involved in the project.
The irregularities ranged from complete non-delivery, to the sale of fertilizers to private companies engaged in trading or manufacturing fertilizers.
Yet, FDC noted the World Bank declared it as a successful project.
Conversely, the Textbook Procurement Project under Second Social Expenditure Management Project (SEMP2) was marred by accusations of rigged bidding results, defective school textbooks, bribery and World Bank intrusion.
Meanwhile, the ARCP was reportedly implemented without a clear and thorough study much more, environmental and health protection.
It was also accused of not meeting its required targets. It was reported that only 39 percent of the total number of agrarian reform beneficiaries in the ARCs have been fully trained on ARC development. - GMANews.TV
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